Question

X, Y and Z were partners in a firm sharing profits and losses in the ratio of 3:2:1. The profit of the firm for the year ended 31^st March, 2007 was Rs. 3,00000. Y dies on 1st July 2007. Calculate Y’s share of profit up to date of death assuming that profits in the year 2007- 2008 have been accured on the same scale as in the year 2006-07 and pass necessary journal entry.

Answer 1

 Total profit for the year ended 31^st March 2007 

= Rs 300000 Y’s share of profit up to date of death 

= (300000 X 2/6 X 3/12) = 25000

Profit and Loss suspense A/C Dr.	25000
To Y’s capital A/C		25000
( Y’s share of profit transferred to Y’s capital A/C)